Lotte to hike chocolate prices amid surging cocoa costs

By Kim Dong-young Posted : May 29, 2024, 10:38 Updated : May 29, 2024, 17:58
A photo of some chocolates on display stand with prices that have gone up Yonhap photo
Chocolates are on display in a shop in Seoul in this undated photo.  Yonhap

SEOUL, May 29 (AJU PRESS) - Lotte Wellfood, Korea's top chocolate maker, plans to raise the prices of 17 products by 12 percent next month to cover surging global cocoa costs.

Cocoa prices have nearly doubled since the start of 2024 due to poor harvests in West Africa, which accounts for 60 percent of the world supply.

Lotte initially planned to raise chocolate prices on May 1 but postponed the hike by a month at the government's request to help stabilize consumer prices during May, which has many family-oriented holidays.

Starting June 1, the retail price of Lotte’s signature Ghana Chocolate bars will increase from 1,200 won ($0.88) to 1,400 won, according to the company. The price of Pepero, thin stick-like chocolate-coated cookies, will rise from 1,700 won to 1,800 won.

Orion Corp., another major chocolate producer, said it will not raise prices. "Cocoa prices are quite burdensome, but we plan to maintain our current prices," an official said.

According to the Intercontinental Exchange, world cocoa futures ranged from $2,000 to $3,000 per ton for the past decade. However, prices surged to $8,109 per ton as of May 23, nearly double the price from the start of this year.

Approximately 60 percent of cocoa beans, the raw material for chocolate, are produced in West Africa, primarily in Ghana and Ivory Coast. 

This year, the output of cocoa is 40 percent below the target for the 2023/24 season due to disease, climate changes, and smuggling, according to the Ghana Cocoa Board.

The situation may worsen with the infestation of the swollen shoot virus, a highly contagious virus affecting cocoa trees. The board says the virus has wiped out 590,000 hectares of farmland from 2018 to 2024.

Global confectionery manufacturers have countered the crisis by reducing the chocolate per serving or increasing prices. 

Mondelēz International, famous for Toblerone and Milka, has announced a 6 percent price rise in the last quarter. Similarly, Hershey declared a nearly 5 percent price increase. Both companies admitted the possibility of further escalation if cocoa prices remain high.
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